January 27, 2011

Global Health Fund Rocked By Corruption Scandal; Germany Suspends Payments!!!

International Business Times
written by Staff
Wednesday January 26, 2011

The Global Fund to Fight AIDS, Tuberculosis and Malaria has been rocked by a shocking scandal.

The Associated Press reported that as much as two-thirds of the global health fund's grants have been swindled by corruption.

Some of the money donated was accounted for with "forged documents or improper bookkeeping," which indicate it was embezzled. Donated drugs were sold on the black market.

The findings were made by the fund's inspector general's office. The officials examined only a small fraction of the billions of dollars the fund possesses. However, "the levels of corruption in the grants they have audited so far are astonishing," reported the Associated Press.

In response, Germany has suspended all financial support for the fund, including a pledge of $270 million for 2011.

Sweden has also suspended its $85 million annual donation.

Below are some specifics of the corruption:

In a program in Mauritania to fight AIDS, 67 percent of the money was misspent

In a program in Mali to fight tuberculosis and malaria, 36 percent of the money was misspent

In a program in Djibouti, 30 percent of grants were misspent. Some of it was used to buy cars and motorcycles

In Zambia, $3.5 million in spending was unaccounted for and an accountant embezzled $104,130

This scandal comes after the global health fund entered its replenishment phase in 2010, meaning it needed to secure continued financing from donors.

In March of last year, the organization said from 2011 to 2013, it needs at least $13 billion to fund existing program at lower levels than past years, $17 billion to fund existing programs at the same level as past years, and $20 billion to scale up the programs.

Now, as countries have pulled pledges and others are contemplating doing so, the global health fund's programs may face significant financing shortfalls. [Hmm... I wonder why?]

1 comment:

The Global Fund said...

The Global Fund would like to make the following statement about how it protects its grant money.
Two articles published by the Associated Press in recent days and picked up by a large number of media outlets have seriously misrepresented the extent of fraud discovered in grants financed by the Global Fund.
Media reports alleging that “billions of dollars have been misappropriated from the Global Fund” or that the extent of fraud uncovered is “massive” are irresponsible, false and misleading.
To date, the Global Fund’s Office of the Inspector General has undertaken audits or investigations in 33 of the 145 countries where the Global Fund has grants. As a result of this, the total amount of misappropriated or unsubstantiated funds that the Global Fund is demanding to be returned at present is $34 million. While all fraud is unacceptable and the Global Fund is taking strong and firm action to recover such losses, one should keep in mind that this amount represents 0.3 per cent of the total amount of $13 billion disbursed to countries by the Global Fund so far.

In short, the vast majority of Global Fund resources are delivering tremendous progress in the fight against AIDS, TB and malaria and saving millions of lives through the hard work of thousands of hard-working, honest health workers around the world.
Some media reports have also stated that the controls in place to monitor flows of Global Fund financing to countries are non-existent or inadequate. These reports are false and misleading.
Global Fund grants are subject to a rigorous system of financial controls. All grant spending is verified by an independent agency which is required to report at least annually (and in many cases quarterly) on grant progress. All grant progress reports are posted online.
In addition to these controls, the Global Fund’s Office of the Inspector General provides an additional independent layer of oversight and scrutiny to uncover wrong-doing.
The Global Fund is committed to the highest standards of transparency and accountability and has acted upon each instance of misuse of its resources by taking strong and swift action, by suspending grants, freezing cash disbursements and by demanding a return of misused funds.
In addition, its Board of Directors has put in place a long-term plan to ensure that the Global Fund remains fully capable of detecting and preventing fraud and corruption.

For more information please visit: http://www.theglobalfund.org/en/howprotect/